By Denise M. Roberts
The hectic pace of life has added a new dimension to the level of productivity in nearly every business endeavor. Technology now plays host to a drive to succeed (quickly) that is unmatched in human history, lending credence to the modern equivalent of being astute in business: Work smarter, not harder.
Many meanings may be gleaned from this gem, each a facet of consideration based on a company’s level of commitment to succeed and how. It doesn’t matter how large or small a firm is if it’s willing to learn from past experience and proceed forward in spite of adversity. Hindsight is, after all, 20-20. With this in mind, I present you with the vision of success espoused by Jerry Peterson in his December 1974 editorial, when the country was gripped in the throes of economic recession. Judge if your company has heeded the lessons of its past and what actions need to be taken to ensure a successful future.
The Bright Side of a Recession
“We don’t know of anyone who hasn’t felt, in one way or the other, the effects of this sagging economy. Now that the government has officially declared us in a recession, it’s easier than ever to blame our problems on inflation, the tightness of money and Dow Jones. American business has a government declared cop out and a lot of us are using it to explain our deficiencies.
If we try hard enough, we can stew about the country’s business problems indefinitely, and like the turtle, pull in our necks. We can even psych ourselves into total inactivity and submit to the warm blanket of defeat. Forces beyond our control and all that.
Or we can look at the positive side of recession and take advantage of some of the side effects that favor direct selling industries like water conditioning. We can even believe, with good reason, that now is the time to act.
The current state of the industry is neither great nor abominable. We seem to be somewhere in between and holding. We recently visited several manufacturers, suppliers and dealers in the Midwest and were please to find that none have felt any serious economic effects. There were, however, many concerns.
One concern expressed by manufacturers is large inventories. The high cost of money has made it necessary for some to increases their liquidity by cutting inventories to the bone. For component suppliers, the result has been a sales decline. We asked manufacturers whether their dealers’ purchases were done, Generally, the answer was no, but if there is some indication that dealer inventories are also higher than normal as the result of excessive buying during the resin shortages of late 1973 and early 1974. In other words, the pipelines are temporarily filled. Until these inventories are reduced at the dealer level, manufacturer and supplier sales will drift.
The question we posed to dealers was central to the whole state of the industry: “How are your sales holding up?” Nothing is going to happen at any other level if the dealer isn’t selling product, so we were happy to learn that the majority of dealers claim to be doing as well or better than 1973, a banner year. Again, though, there are concerns, particularly regarding the availability of financing. Some lending institutions have reduced their terms from five to three and even two years on consumer goods. This means higher monthly payments for the buyer and increases sales resistance.
From what we were able to gather in the Midwest and subsequent calls to key industry members in other parts of the country, water conditioning equipment is still very much on the move. To say the industry is booming might be too much to accept, but to say that I can boom in a recession period is wholly realistic.
Certain areas of the country are already faced with higher than unusual unemployment rates, which means that the available labor pool is growing. As we all know, the success of a direct selling business is largely contingent on the quantity and quality of its sales personnel. Our major continuing problem as an industry has been attracting capable people, so when unemployment rises, our sales potential rises. Theoretically, we should now be able to find a better grade of salesman or routeman and put him to more effective use. This proved true in the late 1960’s when, in California, the aerospace and specialty electronics industries released thousands of men, many of whom went to work in direct selling.
It also is to our advantage that the consumer has less pre-spent income on hand. This is money that normally would be dedicated to house and automobile payments. The decreases in housing starts and automobile sales suggests that the consumer has free, uncommitted capital on hand. It’s not to say that this dollar pool will be indiscriminately spent. Impulse buying, as it relates to department store sales, is already on the wane. But the capital is there and the direct salesman has the best chance of getting it.
How do we appeal to the today’s welloff, but cautious consumer? A year ago we would have advised the salesman to sell water conditioning on the basis of its esthetic, time-saving benefits. Clean skin, luxurious hair, no bathtub ring and so on. Today we would advise a focus on dollar savings as they relate to detergent, plumbing, energy costs and maintenance supplies. In other words, conditioned water doesn’t cost…it pays.
This is a time of great opportunity for the water conditioning industry. Our business is uniquely structured to capitalize on a soft labor market and cautious consumerism because we don’t have to wait for our market to come to us. It’s time to shed the nonsense that we can’t grow because the economy won’t let us. It’s time to stick out our necks and move.”